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HOA Reserves

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Can You Just Change Rules You're Ignoring? Discussion Forum Follow-Up
August 2012
An HOAleader.com reader writes, "I'm part of a nine-member association in Minnesota, and we've been discussing reserves. We have a reserve provision in our bylaws but have historically used special assessments to pay for common area repairs (i.e., we have no reserves). Since our practice differs from our bylaws, we have agreed to change our bylaws to remove the reserve requirement and to restate what's common and what's not--to reflect how we actually behave today. So in the future we'd like to consider things like roofs to be aligned with the specific resident(s) vs the whole HOA. It's complicated in that eight of our nine units are really fancy duplexes, but we've agreed that we want to move expenses as close to home owner as possible and only share things that are truly common, such as our roads. Our complex is 15 years old. Aside from the risk of repair timing, variation, and likely neighborly conflict, are there any restrictions to us taking these actions? Also, what are we missing? I'm sure there are tons of things to think about (I've read the various documents on this website so I understand that our approach goes against convention)." Here our experts discuss the reserve issue and then the broader issue of ignoring your rules and then changing them to reflect your errant ways. . . . keep reading

What's a Small, Self-Managed HOA to Do with Its Reserves?
March 23, 2012
In this week's tip, we offer insight to an HOAleader.com reader at a 32-owner, self-managed HOA in Virginia. Our reader wants to know how investing his HOA's reserves in an interest-bearing account or certificate of deposit will affect his HOA's nonprofit status. . . . keep reading

Smart Reserve Investments for Small, Self-managed HOAs
March 2012
An HOAleader.com reader at a 32-owner, self-managed HOA in Virginia wants to know how investing his HOA's reserves in an interest-bearing account or certificate of deposit will affect his HOA's nonprofit status. Here we discuss the rules and risks of investing reserves. . . . keep reading

4 Arguments to Combat Short-Term Owners' Resistance to Long-Term HOA Planning
October 2011
It's an all-too-common problem at HOAs: Owners who don't plan to stick around for more than a few years will resist or oppose repairs, improvements, and reserve funding that benefits later owners. What's the best argument for showing short-termers that they're harming their own financial interest? . . . keep reading

Definition: HOA Reserve Study
"A reserve study is a study made of all the major capital systems in the association," explains Robert Galvin, a partner at Davis, Malm & . . . keep reading

Helping Owners Fund a Special Assessment
June 2010
Here, we hear how condominium and homeowner association boards crafted creative financing that helped them pass a special assessments and offer tips for funding your own special assessment. . . . keep reading

Looking to Your Reserves When Your Homeowners Association Needs a Loan
March 12, 2010
Not enough funds in your operating account to pay the insurance premium due next quarter because a number of your homeowners are behind in assessments? This week's tip offers a possible solution for boards that have a short-term cash crunch: borrowing from reserves. . . . keep reading

HOA Finances: If Your Condo or Homeowners Association Needs a Loan, Can You Look to Your Reserves?
March 2010
If your HOA is short on cash for an insurance payment or would like to make an equipment purchase, can you borrow against that large chunk of money in your reserve fund? Would that even be wise? Here we discuss whether taking a loan from your condo or homeowner association reserves is proper or advisable. . . . keep reading

HOA Finances: Tips for Handling Your Reserve Account
March 2010
Are you putting enough money aside to pay to replace or repair your HOA's buildings and amenities? Is it possible your condo or homeowner association is putting too much aside? Does the HOA board know how reserves are supposed to be used? This article provides tips on how much to save and how to properly use association reserve accounts. . . . keep reading

What Financial Information Must Your Association Disclose to Prospective Homeowners?
December 2009
One of your members has put her unit up for sale. She gets an offer and accepts it. You then get a request for all kinds of home owners association records from the buyer. What's your response? What must your association provide when prospective homeowners ask for your association's governing documents? What about your financial documents and minutes? What if the buyer asks the number of delinquent owners and the amount of the delinquencies? The answer to those questions depends on your state's law and your internal practices. Some states have rules requiring associations to provide extensive detail to potential buyers. Others are silent on the issue. Here's an overview. . . . keep reading

How Reserve Studies Can Keep Your HOA in Compliance and Protect You From Personal Liability
August 14, 2009
Even if your state doesn't mandate that your association do a formal reserve study every so often, it may indirectly--and strongly--suggest that you meet that standard. . . . keep reading

HOA Reserve Studies: What You Need to Know
August 2009
Just what is a reserve study? What should it include, and how often should it be done? We've got answers. . . . keep reading

HOA Facilities: Planning Your Association's Maintenance Program
August 7, 2009
This week's tip is about planning your HOA's maintenance checkup. . . . keep reading

HOA Facilities: How to Think About Maintaining Your Assets--And A Practical HOA Maintenance Checklist
August 2009
Not sure what maintenance your condo or homeowners association property should have and when? We're here to help. Here's some insight on how to view property maintenance, along with a list of the inspections and work your community's assets should have. . . . keep reading

HOA Reserve Funds: The Pros and Cons of Underfunding Reserves
April 2009
Some boards stop funding--or underfund--their homeowners association reserves as a way to easy the burden on homeowners during difficult economic times. Is this a smart move for your HOA? . . . keep reading

HOA Finances: Don't Rely on Special Assessments for Major Repairs If You Can Help It
April 3, 2009
Because many people are hurting financially right now, your homeowners association board might be considering whether or not you should underfund your HOA's reserves. After all, if you ever need to make a major repair, you could make up for a shortfall through a special assessment. No harm. No foul. Right? . . . keep reading

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